Problems in Buy to Let Housing Market

Recent data from the Bradford & Bingley suggested that arreas by buy to let landlords had risen by 50%. The fear is that a rise in arreas and falling house prices could encourage landlords to sell now and cash in on previous equity gains. The buy to let market has become more important with a rise from 200,000 Buy to let Landlords in 2000 to 1.1 million today.

If buy to let landlords jumped on the selling bandwagon it could further harm Britain’s beleagured housing market. This follows news of the lowest mortgage approvals since 1993.

The construction industry also reported a significant fall in activity

However,

1. The number of buy to let landlords in arreas is still relatively low. The Council of Mortgage Lenders say the % of buy to let landlords in arreas has  increased from only 0.7% to 0.9% - still below the market average.
2. Rentable incomes are holding up well as lack of mortgage availability is forcing potential home buyers to move into the renting sector. The buy to let market often counters the market trend.
3. Most landlords are in the market for the long term as opposed to short term speculative gains.
4. Bradford & Bingley only accounts for 20% of the buy to let market